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Effects of Fiscal Consolidation in the Czech Republic

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  • Stephen Snudden
  • Mr. Vladimir Klyuev

Abstract

This paper uses the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) to assess the impact of fiscal consolidation on the Czech economy. Its contribution is threefold. First, it provides estimates of dynamic fiscal multipliers for a variety of fiscal instruments (tax and expenditure), consolidation durations, assumptions about credibility, and monetary policy responses. Second, the paper evaluates the impact on the economy of tightening measures envisaged in the 2011 budget. Third, the paper considers alternative packages for consolidation beyond 2011 to achieve the government’s balanced budget target by 2016 and identifies which forms of adjustment are more "growth-friendly".

Suggested Citation

  • Stephen Snudden & Mr. Vladimir Klyuev, 2011. "Effects of Fiscal Consolidation in the Czech Republic," IMF Working Papers 2011/065, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/065
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    References listed on IDEAS

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    More about this item

    Keywords

    WP; aggregate demand; consumption tax; current account; present value;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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